Lim Chee Ming writes in…
Some of the points that Kuli had brought up during the video interview may be less accurate or not updated but i agree with his general point of view, that we do not have the economies of scale to compete competitively in the world markets. We can have the lowest engineering cost in the world but we don’t have the economies of scale in the manufacturing because our domestic market is so small and our export non existence. Can u imagine that premium manufacturer such as BMW sold 1.2 million cars a year, at such high profit margin, while our Proton manufactures around 180,000 last year? Although BMW’s engineering cost may be 10 times that of Proton but if we look ath its production volume and the kind of margin it made on its car, what does that tell us? This is not to mention that Korean players such as Hyundai makes 4 million cars a year and GM even more. Tun M has even mentioned in a recent interview in Malaysian Business that Proton needs to make 500,000 units a year to have the scale of economies. How can Proton ever achieve that consider that its production is only a quarter of that? Does it mean protection for another 20 years for Proton and Malaysian buyers continue to be deprived of choices for reasonably good quality cars and affordable prices?
I know you’re a car enthusiast but perhaps you’re not mature enough to know abuot how the economics work.
I did not make any claims in this blog that I know how the economics of car manufacturing work. From where did you get that assumption?
My dear readers… any comments on what he has shared?